David Abrams’ 2022 Portfolio: Top 5 Stock Picks

2. Alphabet Inc. (NASDAQ:GOOGL)

Abrams Capital Management’s Stake Value: $407 million

Percentage of Abrams Capital Management’s 13F Portfolio: 9.5%

Number of Hedge Fund Holders: 160

Alphabet Inc. (NASDAQ:GOOGL) is the third largest technology company and the fourth largest corporation in the world with a market cap of $1.7 trillion as of the first quarter of 2022.

On June 2, Piper Sandler analyst Thomas Champion lowered his price target on Alphabet to $2,775, down from $2,900 and kept an Overweight rating on the stock. Champion told investors in a research note that after two years of stretch, digital advertising spend is on its way to recovery, implying a boost in Alphabet’s revenue with its 29% market share in digital advertising.

Alphabet Inc. (GOOGL) confirmed a 20 to 1 stock split in its February earnings release. Investors that own shares on the record date of July 1 will each receive 19 additional Google shares for each one they hold on July 15. 

Farrer Wealth Advisors mentioned Alphabet Inc. in their Q1, 2022 investor letter. Here’s what they said:

“We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)

Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)